* Graphic: World FX rates in 2020 tmsnrt.rs/2egbfVh
* Graphic: Trade-weighted sterling since Brexit vote tmsnrt.rs/2hwV9Hv
LONDON, July 7 (Reuters) – Sterling steadied versus the dollar and the euro on Wednesday after hitting a week’s high against the dollar and a 12-day high against the euro this week as Britain set out reopening plans following the COVID-19 pandemic.
Sterling was flat versus the dollar at 1.3801 by 0830 GMT, after rising on Tuesday to its highest of $1.3898 since June 28.
Versus the euro, it flattened at 85.67 pence, after jumping to a 12-day high of 85.36 pence in the previous session.
Analysts said sterling had found support this week on British Prime Minister Boris Johnson’s plans to end social and economic COVID-19 restrictions in England in two weeks’ time.
Johnson said on Monday the government aimed to end restrictive measures on July 19, with a final decision to be taken next week. He said the step would end formal limits on social contact, the instruction to work from home and mandates to wear face masks.
“The UK government’s decision to go ahead with a further easing of restrictions on 19 July has endorsed the market’s relatively relaxed stance towards the recent flare-up in Covid-19 cases in the country,” ING analysts wrote in a note to clients.
But the analysts added that sterling was now left without other domestic drivers and cable could fall below $1.38.
Sterling has been among the top performing G10 currencies this year following Britain’s quick vaccination rollout.
Those gains have evaporated in recent weeks as other countries implemented successful vaccination programmes and as the Federal Reserve hinted at an earlier than expected end to easy monetary policy, giving the dollar a boost.
Another reason for the recent leg lower in the pound was a warning by Bank of England governor Andrew Bailey against an overreaction to inflation in Britain. (Reporting by Joice Alves, Editing by Timothy Heritage)
